From CNBC.com:
General Motors's new chief executive told CNBC that filing for Bankruptcy may be the best option for the struggling automaker.
In a taped interview to be aired tonight on NBC Nightly News, Fritz Henderson said that because of greater demands from the Obama administration to restructure, GM is considering the bankruptcy option. The auto giant previously had ruled out such a move, saying it would discourage people from buying GM cars.
So basically Washington would backstop the Warranties on GM Cars so people would (theoretically) keep buying them and would also provide the debtor in possession financing so that GM can re-structure under Chapter 11. I've often said that the main hitch in the bailout of the auto industry was that the Obama Administration was attempting to do things that can only be done or can be done much easier under bankruptcy law without declaring bankruptcy.
Well, now looks like everyone is slowly coming to that unwelcome realization. The question remains whether a bankrupt car company can continue to sell cars and function even with a host of government guarantees.
Welcome, once again folks to Uncharted Water, the Captain has turned on the Fasten Seat Belt sign.